U.S. GDP climbs 6.5% buoyed by consumers, businesses

Growth tempered by supply chain constraints on inventory

FILE - Shoppers wait in line outside a Chicago downtown retail store as others pass by, Wednesday, May 26, 2021. Fueled by vaccinations and government aid, the U.S. economy grew at a solid 6.5% annual rate last quarter in another sign that the nation has achieved a sustained recovery from the pandemic recession. (AP Photo/Shafkat Anowar, File)

The U.S. economy grew solidly in the second quarter, but the pace was below expectations as robust consumer spending and business investment on equipment were tempered by a sharp inventory drawdown amid supply chain constraints.

Gross domestic product rose at a 6.5% annualised rate last quarter, the Commerce Department said on Thursday.

The economy grew at a 6.3% rate in the first quarter, revised down from the previously reported 6.4% pace.

The National Bureau of Economic Research, the arbiter of U.S. recessions, declared last week that the pandemic downturn, which started in February 2020, ended in April 2020.

Economic expansion is expected to remain solid for the remainder of this year. A resurgence in COVID-19 infections, driven by the Delta variant, however, poses a risk to the outlook. Higher inflation, if sustained, as well as ongoing supply chain disruptions could also slow the economy. President Joe Biden’s administration provided $1.9 trillion in pandemic relief in March. That brought the amount of government aid to almost $6 trillion since the pandemic started in the U.S. in March 2020.

Almost half of the population has been vaccinated against COVID-19, allowing Americans to travel, frequent restaurants and attend sporting events among services-related activities that were curbed early in the pandemic.